Paradigm is seeking to raise fresh funds for crypto investments as venture capitalists return to the growing digital asset industry.
According to a report by Bloomberg on April 2, the crypto investment company Paradigm is planning to raise up to $850 million for a new fund, driven by Bitcoin’s rebound beyond its all-time high and the resurgence of the cryptocurrency market close to its peak in 2021.
Data from RootData indicates that investments in crypto protocols and projects surged by over 50% last month, with capitalists injecting approximately $1.1 billion into the digital asset sector. Decentralized finance (DeFi) solutions operating on platforms like Ethereum, Polygon, and other DeFi-centric blockchains attracted the most significant funds.
Paradigm aims to gather at least $750 million, potentially marking its largest fundraising since 2021 when the company raised $2.5 billion for a crypto fund, which was then the largest of its kind until Andreessen Horowitz (a16z) launched a $4.5 billion crypto investment vehicle in May 2022.
Other venture capital firms, such as a16z, Hack VC, and Hivemind, are also involved in fundraisers ranging from $50 million to $150 million as the crypto market gains momentum once again.
Paradigm’s Investment in FTX
Led by Coinbase Co-Founder Fred Ehrsam and former Sequoia Capital executive Matt Huang, Paradigm was also an investor in the now-bankrupt crypto exchange FTX. Huang was part of a team that invested $278 million into Sam Bankman-Fried’s venture.
Last November, during a three-week trial, Huang, the former Sequoia partner, testified that Bankman-Fried had misled Paradigm regarding FTX’s operations. Huang’s testimony contributed to a conviction against FTX’s founder.
Following the bankruptcy of FTX, Huang’s firm wrote down its investment in the exchange to zero. Bankman-Fried was subsequently sentenced to 25 years in prison for defrauding investors and customers of over $8 billion.
